In slightly more distant times, when the economy was still performing well (or the faults in it hadn't come to light), the UK military was getting annual payrises of about 2.5-3.5%. The government (or at least individual politicians) said they would like to award more, but didn't want to drive up inflation, which had a target of 2%. Meanwhile, civilian payrises could be 4-5% or even more (I remember one ex-military person talking about his 8% payrise in his offshore job). Thus, the civilian workforce was receiving benefits the public sector weren't.
Now, with the economy in trouble, civilian payrises are reduced, or cut altogether, while the public sector will no doubt continue to get something, so the public sector is better off. Public sector jobs are also generally more secure...
Its called swings and roundabouts.
As to the level of public sector pay, with deflation more of a factor than inflation, and the desire to pump money into the economy, you could try to construct an arguement that says the government should give the public sector generous payrises. It will make up for all those years when they, "would have liked to pay more", and help actually stave off deflation....
Of course, I can't actually see that happening!!! There will no doubt be, yet again, a good reason why the government can't pay "as much as it would like"...